2021-12-30-亚开行-发展服务业_促进中非经共体国家的经济多样化（英）_149页_2mb

Summary of "Developing the Services Sector for Economic Diversification in CAREC Countries"

Core Content

This document outlines the importance of developing the services sector as a strategy for economic diversification in CAREC (Central Asia Regional Economic Cooperation) countries. It highlights the need for a shift from resource-intensive and primary commodity-based economies to more diversified and service-oriented ones to enhance productivity, reduce vulnerability to market fluctuations, and promote sustainable growth.

Main Points

1. Role of the Services Sector in Economic Development

• The services sector is a key driver of productivity, job creation, and economic growth.
• It plays a vital role in supporting manufacturing and other economic activities as an input and as a market facilitator.
• Services are essential for economic resilience and inclusive growth.
• The sector contributes significantly to GDP and employment, with its share increasing as countries develop economically.

2. International Experience with Service-Led Economic Diversification

• Many countries have successfully diversified their economies by developing services, especially through digital transformation and technological advances.
• The shift from manufacturing to services does not necessarily hinder productivity growth, as evidenced by studies from the IMF and OECD.
• Services have become more tradable due to digitalization, reducing transaction costs and proximity burdens.

3. Impact of the COVID-19 Pandemic

• The pandemic highlighted the vulnerability of economies reliant on primary commodities and underscored the need for faster economic diversification.
• It demonstrated the potential of digital transformation and services to support recovery and resilience.
• CAREC countries experienced sharp declines in export prices for primary commodities, reinforcing the need for a more diversified economic structure.

Key Services Subsectors for Economic Diversification

The following services subsectors are identified as critical for economic diversification and sustainable development in CAREC countries:

• Telecommunication and Information Services: Vital for digital transformation and supporting other economic activities.
• Financial Services: Essential for economic growth and development, especially in enhancing access to formal financial services.
• Education, Research, and Experimental Development Services: Crucial for improving human capital and innovation.
• Tourism-Related Services: Can boost employment and economic growth, particularly in regions with natural and cultural assets.
• Freight Transportation and Storage Services: Important for linking economies with global and regional value chains.
• Quality Testing and Certification Services: Necessary for improving product standards and market access.
• Other Agriculture-Related Services: Support value addition and competitiveness in agricultural exports.

These subsectors are largely producer services, meaning they are inputs to other economic activities and their efficient functioning is essential for overall economic performance.

Enabling Conditions for Services Sector Development

To foster the development of the services sector and achieve economic diversification, the following conditions are recommended:

• Improving Governance: Strengthening institutions and regulatory frameworks is essential for creating a conducive environment.
• Enhancing Market Competition: Promoting a level playing field allows the private sector to play a greater role in service development.
• Deepening Regional Cooperation and Integration: Facilitates policy coherence, mutual recognition, and reciprocal liberalization of services trade.
• Raising Labor Market Efficiency: Enhancing vocational training and labor institutions can support the growth of the services sector.
• Developing Physical and Digital Infrastructure: Critical for enabling the efficient delivery of services and integration into global value chains.

Challenges and Opportunities

• Despite growth in the services sector, many CAREC countries still face challenges in policy and regulatory development.
• Services inputs are often underdeveloped, limiting the potential for economic diversification.
• CAREC countries have made progress in WTO membership and GATS commitments, but there is a need for more liberal and open trade policies, particularly in areas involving natural persons.
• Digitalization and technological advancement offer significant opportunities for expanding the tradability of services and enhancing economic performance.

Conclusion and Recommendations

• A coherent and comprehensive approach is needed to support the balanced development of interdependent services subsectors.
• Strengthening legal and regulatory frameworks is key to maximizing the benefits of a developed services sector.
• Liberalizing trade in services, particularly through reducing FDI barriers, can enhance competition and economic growth.
• Careful market opening and institutional development are necessary to manage adjustment costs and ensure long-term benefits.
• Regional cooperation and integration are crucial for improving domestic regulations, fostering policy dialogue, and building trust among CAREC countries.

Key Information

• The services sector has a faster growth rate of gross value added compared to agriculture and manufacturing in most CAREC countries.
• Services exports have shown positive growth from 2005 to 2019, but remain underdeveloped.
• CAREC countries have made commitments under the GATS and regional trade agreements, but implementation is uneven.
• Digitalization and technological advances are enhancing the tradability and efficiency of services.
• The services sector is a critical enabler for economic resilience, especially in the wake of the pandemic.